UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________________________
FORM
10 – QSB
_______________________________
[mark
one]
x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF
1934
|
|
For
the quarterly period ended: September 30,
2007
|
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF
1934
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|
For
the transition period from ______________ to
______________
|
Commission
File Number 333-142856
_____________________________________________________________
1st
Home Buy &
Sell Ltd.
(Exact
name of registrant as specified in its charter)
Nevada
|
APPLIED
FOR
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer
Identification
Number)
|
14199
– 32A Avenue, Surrey, BC CANADA V4P 3P4
(Address
of principal executive offices including zip code)
(604)
541-4173
(Registrant’s
telephone number, including area code)
CSC
Services of Nevada, Inc., 502 E. John Street, Carson City, NV
89706
(Name
and address of agent for service)
(775)
882-3072
(Telephone
Number, including area code, of agent for service)
with
a
copy to:
Luis
Carrillo, Esq.
SteadyLaw
Group, LLP
501
W.
Broadway, Suite 800
San
Diego, CA 92101
Telephone
(619) 399-3090
Telecopier
(619) 330-1888
Check
whether the issuer (1) filed all reports required to be filed by Section
13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter
period
that the registrant was required to file such reports), and (2) has been
subject
to such filing requirements for the past 90 days. Yes o No x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x
Number
of
shares outstanding of the issuer’s common stock as of the latest practicable
date: 5,000,000 shares of common stock, $.001 par value per share, as of
November 26, 2007.
Transitional
Small Business Disclosure Format (check one): Yes o No x
Quarterly
Report on FORM 10-QSB For The Period Ended
September
30, 2007
1st
Home Buy &
Sell Ltd.
PART
I. FINANCIAL INFORMATION
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Page
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Financial
Statements
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4
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Management’s
Discussion and Analysis or Plan of Operation
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14
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Controls
and Procedures
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35
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PART
II. OTHER INFORMATION
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Legal
Proceedings
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36
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Unregistered
Sales of Equity Securities and Use of Proceeds
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Defaults
Upon Senior Securities
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Submission
of Matters to a Vote of Security Holders
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Other
Information
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36
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Exhibits
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PART
I.
1st
Home Buy &
Sell Ltd.
September
30, 2007
|
Index
|
BALANCE
SHEET (CONSOLIDATED)
|
F–1
|
STATEMENTS
OF OPERATIONS (CONSOLIDATED)
|
F–2
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STATEMENTS
OF STOCKHOLDERS' EQUITY (CONSOLIDATED)
|
F–3
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STATEMENTS
OF CASH FLOWS (CONSOLIDATED) |
F–4
|
NOTES
TO FINANCIAL STATEMENTS
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|
1st
HOME BUY AND SELL
LTD.
BALANCE
SHEET (CONSOLIDATED)
September
30, 2007
(In
Canadian Dollars)
UNAUDITED
|
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash
|
|
$ |
5,250
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|
Total
current assets
|
|
|
5,250
|
|
Equipment,
net of accumulated depreciation
|
|
|
3,479
|
|
Patents,
net of accumulated depreciation
|
|
|
4,007
|
|
Investment
in Subsidiary Company
|
|
|
100,000
|
|
|
|
$ |
112,737
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
|
11,350
|
|
Shareholders’
loans
|
|
|
8,463
|
|
Demand
Loan Payable
|
|
|
153,176
|
|
Total
current liabilities
|
|
|
172,989
|
|
Long
Term Liabilities
|
|
|
0
|
|
Total
Liabilities
|
|
|
172,989
|
|
Stockholders'
Equity (Deficit)
|
|
|
|
|
Preferred
stock, USD $.001 par value; 10,000,000
|
|
|
|
|
shares
authorized; no shares issued or outstanding
|
|
|
0
|
|
Common
stock, USD $.001 par value; 100,000,000 shares authorized;
|
|
Issued: 5,300,000
shares
|
|
|
5,300
|
|
Additional
paid-in capital
|
|
|
114,800
|
|
Retained
earnings (deficit)
|
|
|
(180,353 |
) |
Total
stockholders' equity (deficit)
|
|
|
(60,252 |
) |
|
|
$ |
112,737
|
|
1st
HOME BUY AND SELL
LTD.
STATEMENTS
OF OPERATIONS (CONSOLIDATED)
For
the
Three Months Ended September 30, 2007 and 2006
(In
Canadian Dollars)
UNAUDITED
|
|
|
|
|
|
2007
|
|
|
2006
|
|
Revenue
|
|
$ |
8,832
|
|
|
$ |
12,128
|
|
Expenses
|
|
|
|
|
|
|
|
|
Advertising
& Marketing
|
|
|
1,946
|
|
|
|
3,656
|
|
Bank
Charges
|
|
|
386
|
|
|
|
723
|
|
General
and administrative
|
|
|
11,647
|
|
|
|
6,172
|
|
Management
Fees
|
|
|
24,049
|
|
|
|
26,925
|
|
Professional
Fees
|
|
|
1,500
|
|
|
|
3,434
|
|
|
|
|
39,528
|
|
|
|
40,910
|
|
|
|
$ |
(30,696 |
) |
|
$ |
(28,781 |
) |
Net
income (loss) per common share (basic and
|
|
|
|
|
|
|
|
|
fully
diluted)
|
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
Weighted
average number of common
|
|
|
|
|
|
|
|
|
shares
outstanding
|
|
|
5,200,000
|
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
1st
HOME BUY AND SELL
LTD.
STATEMENTS
OF STOCKHOLDERS' EQUITY (CONSOLIDATED)
For
the
Period Ended September 30, 2007
(In
Canadian Dollars)
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Paid-In
|
|
|
Retained
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Earnings
|
|
|
Total
|
|
Balances,
July 1, 2006
|
|
|
5,000,000
|
|
|
$ |
5,000
|
|
|
$ |
100,100
|
|
|
$ |
(8,794 |
) |
|
$ |
96,306
|
|
Net
profit (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(140,863 |
) |
|
|
(140,863 |
) |
Balances,
June 30, 2007
|
|
|
5,000,000
|
|
|
$ |
5,000
|
|
|
$ |
100,100
|
|
|
$ |
(149,657 |
) |
|
$ |
(44,556 |
) |
Shares
issued for services
|
|
|
300,000
|
|
|
|
300
|
|
|
|
14,700
|
|
|
|
|
|
|
|
15,000
|
|
Net
profit (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,696 |
) |
|
|
(30,696 |
) |
Balances,
September 30, 2007
|
|
|
5,300,000
|
|
|
$ |
5,300
|
|
|
$ |
114,800
|
|
|
|
(180,353 |
) |
|
|
(60,252 |
) |
1st
HOME BUY AND SELL
LTD.
STATEMENTS
OF CASH FLOWS (CONSOLIDATED)
For
the
Three Months Ended September 30, 2007 and 2006
(In
Canadian Dollars)
UNAUDITED
|
|
|
|
2007
|
|
|
2006
|
|
Cash
Flows from Operating Activities
|
|
|
|
|
|
|
Net
income (loss)
|
|
$ |
(30,696 |
) |
|
$ |
(28,782 |
) |
Adjustments
to reconcile net income (loss) to net
|
|
|
|
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cash
flows from operating activities
|
|
|
|
|
|
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Depreciation
|
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|
325
|
|
|
|
199
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|
Shares
issued for services
|
|
|
15,000
|
|
|
|
-
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
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Accounts
receivable
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|
|
-
|
|
|
|
-
|
|
Prepaid
expenses
|
|
|
-
|
|
|
|
(1,275 |
) |
Accounts
payable and accrued expenses
|
|
|
11,132
|
|
|
|
3,549
|
|
|
|
|
(4,239 |
) |
|
|
(26,309 |
) |
Cash
Flows from Investing Activity
|
|
|
|
|
|
|
|
|
Purchases
of Equipment
|
|
|
-
|
|
|
|
(2,567 |
) |
Purchase
of shares in subsidiary
|
|
|
-
|
|
|
|
(100,000 |
) |
Patents
|
|
|
-
|
|
|
|
(3,489 |
) |
Net
cash flows from investing activities
|
|
|
-
|
|
|
|
(106,056 |
) |
Cash
Flows from Financing Activities
|
|
|
|
|
|
|
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|
Proceeds
from shareholders’ loans
|
|
|
891
|
|
|
|
6,442
|
|
Payments
on shareholders’ loans
|
|
|
(903 |
) |
|
|
(15,227 |
) |
Proceeds
from demand loans
|
|
|
-
|
|
|
|
103,112
|
|
Payments
on demand loans
|
|
|
-
|
|
|
|
-
|
|
Shares
issued for cash
|
|
|
-
|
|
|
|
105,577
|
|
|
|
|
(12 |
) |
|
|
199,904
|
|
Change
in cash
|
|
|
(4,252 |
) |
|
|
67,539
|
|
Cash,
beginning of the period
|
|
|
9,502
|
|
|
|
3,168
|
|
Cash,
end of the period
|
|
$ |
5,250
|
|
|
$ |
70,708
|
|
Cash
paid for interest expense
|
|
$ |
-
|
|
|
$ |
-
|
|
Cash
paid for income taxes
|
|
$ |
-
|
|
|
$ |
-
|
|
NOTES
TO FINANCIAL STATEMENTS
(In
Canadian Dollars)
September
30, 2007
Note
1. The Company and Significant Accounting
Policies
The
Company
1st
Home Buy and Sell
Ltd. (the “Company”) was incorporated under the laws of the state of
Nevada. The Company, through its subsidiary Pacific Coast Development
Corp. (“PCD”), operates a discount real-estate agency in Surrey, British
Columbia, offering a do-it-yourself style of home buying and selling
through the
Canadian Multiple Listing Service (MLS®).
Effective
July 1, 2006, the Company acquired a 70% interest in Pacific Coast Development
Corp. (“PCD”), a British Columbia corporation. This acquisition is described in
more detail in Note 6.
Interim
Financial Statements
The
accompanying unaudited interim financial statements have been prepared
in
accordance with generally accepted accounting principles for interim
financial
information, with the instructions to Form 10-QSB, and with Regulation
S-B. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The results of operations reflect interim
adjustments, all of which are of a normal recurring nature and which,
in the
opinion of management, are necessary for a fair presentation of the results
for
such interim period. The results reported in these interim financial
statements should not be regarded as necessarily indicative of results
that may
be expected for the entire year. Certain information and note
disclosure normally included in financial statements prepared in accordance
with
generally accepted accounting principles have been condensed or omitted
pursuant
to the Securities and Exchange Commission's rules and
regulations. These unaudited interim financial statements should be
read in conjunction with the audited annual financial statements for
the year
ended September 30, 2007.
Reporting
Currency
All
of
the Company's transactions are denominated in Canadian currency so the
Company
has adopted the Canadian dollar as its functional and reporting
currency. Transaction gains and losses that arise from exchange rate
fluctuations on transactions denominated in a currency other than the
local
functional currency are included in "general and administrative expenses"
in the
statement of operations, which amounts were not material for the reported
period.
Cash
Cash
consists of funds in checking accounts held by financial institutions
in
Canada.
Revenue
Recognition
Revenue
is recognized in the period in which it is received or receivable if
the amount
receivable can be reasonably estimated and its collection is reasonably
assured.
F–5
Trust
Accounts
The
corporation does not reflect the trust bank account and the trust liabilities
in
the financial statements. As of September 30, 2007 and 2006, the
corporation had, in trust, $ NIL for its clients
Earnings
per Share
Basic
earnings per share is computed by dividing the net income available to
common
stockholders by the weighted average number of common shares outstanding
in the
period. Diluted earnings per share takes into consideration common
shares outstanding (computed under basic earnings per share) and potentially
dilutive securities. Common stock issuable is considered outstanding
as of the original approval date for purposes of earnings per share
computations. As of September 30, 2007 and 2006, the loss per share
was approximately $0.01.
Estimates
The
preparation of these financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make
estimates and assumptions that affect the reported amounts of assets
and
liabilities and disclosure of contingent assets and liabilities at the
date of
these financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from these
estimates.
Vehicles
and Equipment
Vehicles
and equipment with a life of more than one year and a cost in excess
of $500 are
capitalized and depreciated. Depreciation is computed using the declining
balance method based on the estimated useful lives of the assets.
Patent
The
actual costs to write and file the patent with the US Patent Office was
capitalized in the period in which funds were paid. Although the patent
has not
yet been approved, it is being depreciated using the straight-line method
over
an estimated useful life of 10 years. If the patent application is
ultimately rejected, the remaining balance will be expensed in the period
in
which we receive notice of such rejection.
Income
Taxes
The
Company accounts for income taxes under the asset and liability
method. Under this method, deferred assets and liabilities are
recognized based on anticipated future tax consequences attributable
to
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases. The Company establishes a
valuation allowance to the extent that it is more likely than not that
deferred
tax assets will not be recoverable against future taxable income
New
Accounting Pronouncements
There
are
no new accounting pronouncements expected to have a material effect on
the
Company's accounting policies or financial reporting.
F–6
Note
2. Uncertainty as a Going Concern
The
accompanying financial statements have been prepared assuming that the
Company
will continue as a going concern. However, the Company has suffered recurring
losses from operations and has a net capital deficiency that raises substantial
doubt about its ability to continue as a going concern. The financial
statements
do not include any adjustments that might result from the outcome of
this
uncertainty.
Note
3. Advertising Costs
The
Company expenses advertising and marketing costs as they are incurred.
For the
period ended September 30, 2007 and 2006, the Company incurred advertising
and
marketing costs of $1,946 and $3,656 respectively.
Note
4. Demand Loans Receivable
The
Company has advanced funds to various companies with no note, interest
or
payment plan. The balance as of September 30, 2007 and 2006 was $153,176
and
$103,112 respectively. The loan is due on demand.
Note
5. Related party transactions
A
Corporate officers and shareholders loaned funds to the Company with
no interest
or due date. The balance as of September 30, 2007 and 2006 was $8,463
and $3,566 respectively. The loan is due on demand.
Note
6. Acquisition
Effective
July 1, 2006, the Company entered into a convertible debenture agreement
with
Global Developments Inc. to borrow USD $91,000 (CDN$ 103,112) for the
sole
purpose of acquiring a non-dilutive 70% interest in Pacific Coast Develop
Corp
(“PCD”), a British Columbia corporation.
Prior
to
the acquisition, 1st Home
Buy and Sell
Ltd. was a non-operating shell with no revenue or expenses. The Balance
Sheet of
the Company prior to the acquisition was as follows:
Cash
|
|
$ |
103,112
|
|
Advance
to Shareholders’
|
|
|
5,577
|
|
Total
Assets
|
|
$ |
108,689
|
|
Long-term
debt
|
|
|
103,112
|
|
Total
Liabilities
|
|
|
103,112
|
|
5,000,000
Founder’s Shares Issued at Par Value
|
|
|
5,577
|
|
|
|
$ |
108,689
|
|
Effective
as of the date of the acquisition (July 1, 2006), the Company paid PCD
CDN
$100,000 in cash for 233 common shares of PCD (par value CDN
$1.00).
F–7
The
Balance Sheet of the Company post-acquisition was as follows:
Cash
|
|
$ |
3,112
|
|
Advance
to Shareholders’
|
|
|
5,577
|
|
Shares
in Pacific Coast Development
|
|
|
100,000
|
|
Total
Assets
|
|
$ |
108,689
|
|
Long-term
debt
|
|
|
103,112
|
|
Total
Liabilities
|
|
|
103,112
|
|
5,000,000
Shares Issued at Par Value
|
|
|
5,577
|
|
|
|
$ |
108,689
|
|
The
assets acquired and liabilities assumed of PCD are as follows:
Cash
|
|
$ |
3,168
|
|
Vehicles
and equipment, net
|
|
|
1,912
|
|
Total
Assets
|
|
$ |
5,080
|
|
Accounts
payable and accrued expenses
|
|
|
2,000
|
|
Owing
to Shareholders’
|
|
|
12,351
|
|
Total
Liabilities
|
|
|
14,351
|
|
100
Shares Issued at Par Value
|
|
|
100
|
|
Retained
earnings
|
|
|
(9,371 |
) |
|
|
$ |
5,080
|
|
The
Balance Sheet of PCD as a result of the acquisition was:
Cash
|
|
$ |
103,168
|
|
Vehicles
and equipment, net
|
|
|
1,912
|
|
Total
Assets
|
|
$ |
105,080
|
|
Accounts
payable and accrued expenses
|
|
|
2,000
|
|
Owing
to Shareholders’
|
|
|
12,351
|
|
Total
Liabilities
|
|
|
14,351
|
|
333
Shares Issued at Par Value
|
|
|
333
|
|
Additional
Paid-in Capital
|
|
|
99,767
|
|
Retained
earnings
|
|
|
(9,371 |
) |
|
|
$ |
105,080
|
|
F–8
Therefore,
the Consolidated Balance Sheet of 1st Home
Buy and Sell
Ltd. as a result of the acquisition is:
Cash
|
|
$ |
106,280
|
|
Vehicles
and equipment, net
|
|
|
1,912
|
|
Shares
in Pacific Coast Development
|
|
|
100,000
|
|
Total
Assets
|
|
$ |
208,192
|
|
Accounts
payable and accrued expenses
|
|
|
2,000
|
|
Shareholders’
Loan
|
|
|
6,774
|
|
Long
Term Debt
|
|
|
103,112
|
|
Total
Liabilities
|
|
|
111,886
|
|
5,000,000
Founder’s Shares Issued at Par Value
|
|
|
5,577
|
|
Additional
Paid-In Capital
|
|
|
100,100
|
|
Retained
earnings
|
|
|
(9,371 |
) |
|
|
$ |
208,192
|
|
Since
the
Company had no revenue or expenses prior to the acquisition, the historical
results for 2006 are those of PCD.
Note
7. Subsequent Events
There
were no subsequent events expected to have a material effect on the Company's
accounting policies or financial reporting.
F–9
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF
OPERATION
This
discussion and analysis should be read in conjunction with the accompanying
Financial Statements and related notes. Our discussion and analysis of our
financial condition and results of operations are based upon our financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of financial statements
in conformity with accounting principles generally accepted in the United
States
of America requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of any contingent
liabilities at the financial statement date and reported amounts of revenue
and
expenses during the reporting period. On an on-going basis we review our
estimates and assumptions. Our estimates are based on our historical experience
and other assumptions that we believe to be reasonable under the circumstances.
Actual results are likely to differ from those estimates under different
assumptions or conditions, but we do not believe such differences will
materially affect our financial position or results of operations. Our critical
accounting policies, the policies we believe are most important to the
presentation of our financial statements and require the most difficult,
subjective and complex judgments, are outlined below in ‘‘Critical Accounting
Policies,’’ and have not changed significantly.
In
addition, certain statements made in this report may constitute “forward-looking
statements”. These forward-looking statements involve known or unknown risks,
uncertainties and other factors that may cause the actual results, performance,
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements. Specifically, 1) our ability to obtain necessary regulatory
approvals for our products; and 2) our ability to increase revenues and
operating income, is dependent upon our ability to develop and sell our
products, general economic conditions, and other factors. You can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continues" or the negative of these terms or other
comparable terminology. Although we believe that the expectations reflected-in
the forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance or achievements.
Background
On
August
10, 2006, 1st
Home Buy & Sell Ltd. was formed as a Nevada corporation. Initial
operations commenced under the name Pacific Coast Development Corp., a British
Columbia corporation operating out of Surrey, British Columbia. Prior
to incorporating, we acquired, on July 1, 2006, a 70%, non-dilutive interest
in
PCDC in exchange for $100,000. This pre-incorporation contract
with PCDC was ratified by our Board of Directors immediately after we were
formally incorporated on August 10, 2006.
The
Company conducts all operations through its majority owned operational
subsidiary, PCDC. The acquisition of PCDC shall be referred to hereinafter
as
the “PCDC Transaction.”
Overview
Over
the
years the Multiple Listing Service (“MLS”) has grown in status to become a
virtual monopoly for the marketing of real estate throughout North America.
In
Canada, www.mls.ca currently receives more than 4 million page views per
day. In
recent years with advancements in technology, and in particular the invention
of
the internet, many industries have seen efficiencies created that have reduced
costs for their product or service that has benefited the consumer. This
has yet
to occur with the MLS.
The
current MLS system was developed decades ago before the internet existed,
at a
time when real estate values were relatively low from a historical perspective.
Today, commissions are paid to real estate agents based on a percentage of
the
sale price. As the real estate market matures, and with inflation, the cost
of
the real estate transaction has escalated to the point where consumers believe
they are not receiving value for money.
The
real
estate industry in North America is composed of more than 1.2 million real
estate agents. More than 7 million homes are sold annually through the MLS,
accounting for more than 80 billion dollars in commissions annually (not
including industrial, commercial and investment properties).
The
infrastructure and operations of 1st Home
Buy and Sell
Ltd. provide consumers with a groundbreaking approach to using leading edge
technology to reduce the cost of the real estate transaction, so that we
can
provide our customers with unparalleled value for money.
With
the
protection afforded by the Competition Act of Canada, and similar Anti-Trust
legislation in the United States, 1st Home Buy and Sell’s goal is
to:
·
|
Patent
a new business process for MLS that will bring together technological
advances and innovative business methods to create efficiencies
in the MLS
system that will substantially reduce the cost of the real estate
transaction for both residential and commercial
properties;
|
·
|
combine
existing VOW/IDX technology with For Sale By Owner (FSBO) listings,
creating a new more comprehensive MLS that allows consumers to
search MLS
listings and FSBO listings on the same web site (as well as offer
many
other ancillary services such as a mortgage center, home advertised
through MLS), inspection services, legal services, appraisal services
etc., that are not currently available or
advisable.
|
While
1st
Home Buy and Sell will initially focus on the Canadian market, ultimately
the
company’s goal is to service the American market as well. Initially 1st Home Buy
and Sell’s marketing will be concentrated in the province of British Columbia.
After establishing a market presence in British Columbia, the Company will
expand its market base to other major centers across Canada.
As
part
of our effort to provide consumers with a more personalized experience, the
Company has secured the domain www.homebuyandsell.com, which will
function as our principal website, to tailor to the specific buying and selling
needs of our customers. The Company’s website is fully
operational.
We
are
not a “blank check company,” as we do not intend to participate in a reverse
acquisition or merger transaction. A “blank check company” is defined by
securities laws as a development stage company that has no specific business
plan or purpose or has indicated that its business plan is to engage in a
merger
or acquisition with an unidentified company or companies, or other entity
or
person.
Our
offices are located at 14199 – 32A Avenue, Surrey, BC CANADA V4P 3P4 (604)
541-4173.
General
We
were
incorporated in the State of Nevada on August 10, 2006. Our statutory registered
agent in Nevada is CSC Services of Nevada, Inc., 502 E. John Street, Room
E,
Carson City, Nevada 89706. Our business office is located at 14199 – 32A Avenue,
Surrey, BC CANADA V4P 3P4. Our telephone number is (604)
541-4173.
We
envision becoming North America’s leader in providing “Limited Service Listings”
on MLS, and enable customers to sell their property on the MLS using electronic
bidding and offers over the internet.
We
have
no plans to change our planned business activities or to combine with another
business, and we are not aware of any events or circumstances that might
cause
these plans to change.
Business
Description
Services
We
intend
to enable customers to sell their property on the MLS using electronic bidding
and offers over the internet.
Phase
1 –Patenting of New Business Process
Phase
1
of the business plan involves the patenting of a new business process involving
how listings and sales will be completed on MLS. The new business process
will
take full advantage of technological advances to streamline the real estate
transaction, encourage direct contact between Buyers and Sellers, will reduce
the cost of the real estate transaction, and will involve the following
features:
1(a). Traditional
Pricing Approach: The current realtor community has used its position with
the MLS to maintain its preferred pricing model. The current pricing model
charged to the vast majority of Sellers to gain access to the MLS system
is
based on a percentage of the ultimate selling price of the property (though
there are now numerous “flat fee” MLS service providers in the marketplace as
well). The percentage based commission structure was developed decades ago
when
home prices were very low in comparison to today. With the inflation of real
estate prices over time, this system of how property Sellers are charged
to
access the MLS has not changed, and has become a significant cost in the
real
estate transaction. This is particularly disadvantageous to those with low
equity positions who rely to a large degree on financing their property
ownership.
1(b). New
Pricing Model (and Payment Process): The pricing model for this
new process is set up to take full advantage of new technologies to maximize
savings in the transaction. Fees charged will be based on time of use, or
the
amount of activity received on a particular listing, or a combination of
both
time and activity on the listing, rather than percentage based or flat fee.
This
creates greater affordability, with the Sellers still having the option to
decide whether any commissions/fees would be offered to realtors who bring
offers on the property.
2.
Listing Process
2(a.) Traditional
Listing Approach: A realtor meets with a prospective
Seller (this could be a seller of a residential home, commercial building/strata
space, or commercial office, retail or warehouse space for lease). The
realtor assists the Seller in completing the standard real estate board Multiple
Listing Service forms (usually consisting of the following: Multiple Listing
Service contract, Data Input Sheets (information on the property), an Agency
Disclosure Form/Working With A Realtor form); the completed forms are signed
by
the Seller and the “Listing Agent”/ Realtor A copy of the MLS Contract is given
to the Seller, a copy is sent to the relevant Real Estate Board, and a copy
is
retained by the Listing Agent Realtor. The real estate board then enters
the
data from the completed listing forms on to a computer data base. Realtors
can
then access detailed information on the properties within a “realtor only” web
site. The general public can also access only a portion of the information
on a
separate public real estate web site which publishes only the listing realtor's
contact information so as to encourage the members of the public to contact
the
listing realtor to obtain more specific information on the property, and to
make appointments to view the property through the listing agent. The current
system is designed to place the realtor at the centre of all real estate
transactions, and discourages any direct contact between buyers and sellers,
and
is inflationary to the cost of the real estate transaction.
2(b.) New
Listing Process: Real Estate board MLS Listing Forms will be
sent via e-mail to Sellers who call an (800) number, or will be downloaded
directly from our web site. Sellers will complete the MLS listing forms on
their
own with assistance available on an as needed basis. Once the listing forms
are
completed, the Seller signs the forms and faxes them to our office, where
the
listing forms are reviewed for completeness and accuracy. Follow-up phone
calls
are made to the Seller regarding any deficiencies prior to sending the listing
forms to the real estate board for entry into the MLS
database.
3. Communication
Process:
3(a).
Traditional Communication Approach: Currently all communication is
generally between Listing Agents and Buyers Agents, with no direct communication
between Buyers and Sellers.
3(b).
New Communication Process: A key part of the new communication
process will involve the placement of the Sellers name and contact information
at the beginning of the public remarks section of the MLS listing contract.
This
listing information will then be entered into the MLS database and
posted to the public MLS web site where interested parties can readily see
the
Sellers contact information, and can contact the Seller directly for additional
information.
4.
Offer Process:
4(a)
Traditional Offer Approach: Offers are drafted by Buyers Agents (realtors
representing the Buyers in the transaction) and presented to the Listing
Agent.
The listing Agent then presents the offer to the Seller for consideration.
Any
counter-offers are drafted by the Listing Agent, then presented to the Buyers
Agent, who then presents the counter-offer to the Buyer. This process which
maximizes the realtor involvement continues until an accepted offer is obtained.
Copies of the accepted offer are distributed to all parties involved (including
both Listing Agent and Buyers Agent); The Buyers Agent then usually obtains
a
deposit from the Buyer (which is then placed in a realtor trust account and
held
as a stakeholder) and forms part of the purchase price on the completion
date
for the sale of the property. If subjects are to be removed prior to the
accepted offer becoming binding, the Buyers and Sellers then will initiate
actions to satisfy any conditions within a specified time frame; if and when
all
subject conditions are satisfied, the Buyers Agent will in most cases
prepare a subject removal form (using a standardized real estate board form)
have the relevant parties sign the subject removal form, and distribute copies
to all parties. From here the Buyer and Seller will have their
respective lawyers/notaries complete the documents necessary to receive the
funds and complete the property transfer.
4(b)
New Offer Process: Once a buyer is found who is interested in
placing an offer, Buyers will have several options to prepare the offer.
If the
buyers are working with a Buyers Agent, the Buyers Agent will prepare the
offer.
However, if the Buyer is dealing directly with the Seller:
i.
The Buyer will be able to click on a link on the MLS listing page (on the
Public MLS web site) containing the property listing. The link will take
them to
a web site that will put the Buyer in contact with an independent lawyer
who
will prepare the offer for the Buyer;
ii. The
Buyer will be able to obtain standardized real estate board Contracts of
Purchase & Sale by calling a 1(800) line, and the contracts will be sent to
the Buyer via e-mail or fax; Buyers will
also
be
able to call the 1 (800) help line for assistance in preparing the
offer;
iii.
The Buyer will also be able to click on a link on the MLS listing page (on
the
Public MLS web site) containing the property listing. The link will take
them to
a web site that will guide them through the preparation of an offer using
standardized real estate board contracts and standard real estate board approved
clauses. The completed offer can be printed signed and presented to the Seller
in person, or can be printed , signed, and scanned for electronic delivery
to
the Seller via the internet using e-mail (note: digital signatures will also
be
used to streamline the process where possible);
iv.
If the particular listing is being sold using an auction method. The Buyer
be
able to click on a link on the MLS listing page (on the Public MLS web site)
containing the property listing. The link will take them to a web site that
will
allow the Buyers to make bids via an auction process electronically over
the
internet. The electronic auction will also include features such as a
“Buy it Now Price”, and a “Make your Best Offer” button.
5. Signage
Process:
5(a)
Traditional Signage Process: Realtors who list
properties currently place their own listing signs on the property
with their own contact information (the signs sometimes include the
MLS #). The purpose here is to place the realtor in the position of middleman,
controlling all contact with potential buyers so that there is
no direct contact between buyer and seller. This continues to position
the realtor in a control position, and consequently allows the realtor
to inflate the value of the service provided.
5(b)
New Signage Process: The new signage process encourages direct contact
between Buyers and Sellers by having the owner place their own sign on
the property with their contact information along with the MLS# on the sign.
This will direct calls from prospective Buyers directly to the property
owner. Buyers will also be able use the MLS # to look up additional
information on the property without engaging a realtor middleman.
Corporate
Objectives
·
|
Complete
the pending US and Canadian patent
process.
|
·
|
Create
Corporate web site
|
o
|
Use
IDX / VOW technology to download entire MLS onto web site for
content.
|
o
|
Pursue
partnerships with FSBO companies to offer their customers Limited
Service
Listings on MLS as a value added service; and to offer their content
on
this new web site so that consumers will be able to search both
FSBO and
MLS listings on the same site.
|
·
|
Develop
a marketing campaign
|
o
|
concentrate
initial marketing efforts in the BC market where current real estate
licensing, and real estate board membership is already in
place;
|
o
|
later
spread across Canada, and later expand into US
markets;
|
·
|
Pursue
partnerships with developers, who will be able to take advantage
of MLS
exposure for a nominal fee, and who will create repeat business
to foster
cash flow
|
·
|
To
Create Corporate Identity and Brand Recognition - As in any business
it is
essential to establish brand recognition and brand preference in
order to
ensure long term profitability. 1st
Home Buy and
Sell Ltd. is committed to reinvesting a portion of all corporate
revenues
to an ongoing marketing campaign using traditional sources of media
such
as billboards, radio, TV and news print in order to create this
brand
recognition and preference;
|
·
|
Affordability
- By using the power of the internet combined with effective marketing,
1st
Home
Buy and Sell Ltd. will strive to be the most cost effective and
reliable
service for property owners to effectively market their properties
(residential or commercial) on the
MLS.
|
Industry
Background
Currently,
the marketing for residential and commercial real estate in the United States
and Canada is controlled by national and regional real estate firms, all
of
which offer a high degree of service. However, there is no real competition
on
price offered to the consumer as all of these companies charge the same rates
of
commission in a given market area. Property owners have no real alternative
but
to pay such fees in order to gain access to the MLS. Up until now it has
been
possible for these firms to monopolize the market because the MLS is a closed
system, and it is not cost effective for an individual property owner to
market
his/her own property.
However,
with the protection afforded by the Competition Act in Canada, and similar
Anti-trust laws in the United States, the doors are open for licensed real
estate companies to offer limited service listings at nominal fees to consumers
so that they can access the closed MLS system without paying excessive
commissions. Through 1st Home
Buy &
Sell Ltd., property owners can now be empowered with the ability to market
their
property on MLS in a cost effective manner. Through “Limited Service Listings”
1st Home
Buy
and Sell Ltd. provides: basic advice to assist the Seller through the sales
process, real estate sales data information and reports, and basic
administrative services. Sellers can also utilize other professional services
such as lawyers and appraisers on a fee for service basis to assist them
in the
process as needed.
The
Canadian Real Estate Association (CREA) and its American counterpart, the
National Association of Realtors (NAR), have been actively building a presence
on the internet for the past several years in an effort to preserve their
dominance of the industry, and discourage attempts by others to by-pass the
traditional middleman role of the real estate agent. Over the next 5 to 10
years
their efforts will only be partially successful as market forces will eventually
prevail driving them to restructure (likely to rebate/discounting or fee
for
service) as more and more property owners turn to well organized and cost
effective licensed discount real estate firms, and FSBO marketing
services.
There
are
also several trends to consider which indicate that these types of statistics
will only increase in the future:
o
|
The
continual growth of internet users
|
o
|
(Note:
that in 1999 when www.MLS.ca was first launched, the web site
recorded approximately 200,000 page views per day, in 2003 the
site recorded more than 4,000,000 page views per day and is
steadily rising);
|
o
|
According
to the National Real Estate Board only 28% of home buyers used
the
internet to start their search for real estate in the year 2000.
That
number has skyrocketed to over 78% in
2005;
|
o
|
Today’s
consumers are more knowledgeable, educated and informed than ever
before;
|
o
|
Internet
use is heavy and prevalent among younger
generations.
|
The
real
estate market is changing in North America, mainly as a result of the
internet. In the past, property owners were limited to marketing
their property through the MLS system controlled by Realtors, or advertising
their property themselves using traditional advertising mediums which were
costly and ineffective. As a result of the World Wide Web, a number
of new concepts have developed. The For Sale by Owner (FSBO) and the
Discount Realtor (many offering Flat Fee MLS services) both have emerged
as
alternatives to the full commission structured Realtor.
Competition
We
face
intense competition from a well established and used system in the MLS which
places us at a competitive disadvantage since they are more established.
Many of
these Realtors have been working the referral business among themselves for
years and will be reluctant to change the procedure of doing business. Many
of
these competitors will have greater customer bases, operating histories,
financial, technical, personnel and other resources than we do at this time.
There can be no assurances we will be able to break into this industry offering
a new type of listing service.
In
British Columbia, the predominant discount MLS services are:
o
|
erealty
charges an initial listing fee of $250 and .5% commission upon
sale. At an
average home sale price in the lower mainland of $450,000, total
fees
would add up to $2,500 (plus GST);
|
o
|
1%
X Selling price (Minimum Fee is $5000), plus disbursements (i.e.
advertising – approx. $50 per week X 12 weeks= $600), plus MLS Fees
charged by the local Real Estate Board, plus catalogue fees, plus
a one
time $300 administration fee (Note: the listing fee is split 50/50
with
the Buyers Agent;
|
o
|
Charge
$695 upfront for an MLS Flat Fee
Listing
|
o
|
Catch
is that customers have to use Canada Best Buy as their Buyers Agent
when
they purchase their home.
|
1st
Home Buy and Sell
will position itself to be the price leader in discount MLS service offering
“Limited Service Listings” on MLS for a weekly fee. Listings will include: up to
9 photos, a detailed listing of the home, telephone and e-mail support to
assist
the Seller through the selling process, sales data reports, administration
for
any changes required to the listing, Contracts of Purchase & Sale, Property
Condition Disclosure Statements, access to a national service partner directory
(lawyers, appraisers, home inspectors, mortgage services etc).
Intellectual
Property
We
regard
our intellectual property as critical to our success, and we intend to
rely on
patent, trademark and copyright law, trade secret protection and confidentiality
and/or license agreements with our employees, customers, independent
contractors, partners and others to protect our intellectual property
rights.
Patent applications for
the protection of our technology for a new
approach to MLS listings have been filed with the United States
Patent and Trademark Office and with the Canadian Intellectual Property
Office.
We
cannot
assure you that the steps we have taken to protect our proprietary
rights will be adequate or that third parties will not infringe or
misappropriate our patents, copyrights, trademarks and
similar proprietary rights. In addition, we
cannot assure you that other parties will not assert
claims of infringement of intellectual property
or alter proprietary rights against us.
Description
of Property
Our
executive office is located at 14199 – 32A Avenue in Surrey, B.C., Canada, V4P
3P4, which is also the residence of our Chief Operating Officer. We utilize
approximately 750 square feet of space, and we have no lease. We believe
that
this existing space is adequate for our current needs. Should we require
additional space, we believe that such space can be secured on commercially
reasonable terms.
Estimated
Market Size & Potential Revenue
There
were approximately 800,000 listings on the Multiple Listing Service (MLS)
in
Canada in 2005. (Source - Canadian Real Estate Association). The
National Association of Realtors in the U.S. reported that there were just
over
7 million home sales in 2005.
Our
long
term goal for Canada is to achieve a market share of 5% of all homes listed
for
sale. This would account for approximately 40,000 listings. With
respect to the United States, our goal is to allow for expansion into selected
markets within the US where potential is much greater for revenue growth.
There
are approximately 7 million homes being sold in the US each year. At a future
market share of just 3% of the US market would equate to 210,000 listings,
generating additional revenues.
Marketing
Strategy
Phase
1
·
|
Pursue
marketing efforts in the British Columbia market to create market
awareness, develop initial market share, proof of concept, and
develop
cash flow;
|
·
|
Attract
the average homeowner wishing to sell their homes with promotional
offers
and incentives. The company will concentrate marketing activities
beginning initially in Vancouver then expand into two to three
selected
major Canadian market areas. Marketing activities will be expanded
on a
region-by-region basis until all major Canadian markets are
serviced;
|
·
|
Pursue
relationships/partnerships with FSBO companies that can offer 1st
Home Buy
& Sell Ltd. MLS access as a value added
service;
|
·
|
Pursue
high profile local developers offering early adopters discounts
in
exchange for listings on the site. This will not only provide the
early
content for the site, but it will create credibility with
consumers;
|
·
|
Since
our patent process is underway, pursue discussions with online
auction
sites for development of the online bidding / offer process for
MLS;
|
·
|
Target
homebuilder associations (i.e. The Greater Vancouver Home Builder
Association) and developer based organizations such as the Urban
development Institute with pre-opening
specials;
|
·
|
Create
early market awareness by using free publicity. i.e. radio talk
shows,
community television, and newspaper
columnists;
|
·
|
To
use traditional media such as radio, print advertising, television
and
billboard advertising. Create market awareness in a media blitz
in an attempt to capture market share and reach an early subscriber
base
in each market area.
|
Phase
2
·
|
Once
established in the major market areas in Canada, 1st Home Buy & Sell
Ltd. will seek to expand into the US market areas concentrating
initially
in larger urban centers in the Northwest, such as Seattle, Tacoma,
Portland, etc.;
|
·
|
Pursue
development of the commercial listings market (i.e. office space
for
lease, retail space for lease, warehouse space, etc.). These types
of
listings offer the potential for increased cash flow as they will
typically list for longer periods of time, and offer the potential
to
become repeat customers.
|
The
real
estate industry will be going through some dramatic changes over the next
several years as the new economy reshapes the old. 1st Home Buy & Sell Ltd.
will be part of the technological revolution that is reshaping our economy
and
is positioning itself to capitalize on the changes that are beginning to
take
place in the real estate industry. By raising the necessary capital as outlined
in this business plan 1st Home Buy & Sell Ltd. will be able to: complete the
pending patent applications, with the creation of a comprehensive web site
for
residential and commercial real estate offering Limited Service Listings
on MLS,
the forming of strategic partnerships, implement a step by step marketing
plan
to create a national corporate identity and brand recognition, and ultimately
take the company public creating excellent shareholder value, liquidity and
cash
flow.
Government
Regulation
We
are
not currently subject to direct federal, state, provincial, or local regulation
other than regulations applicable to businesses generally or directly applicable
to electronic commerce. However, the Internet is increasingly popular. As
a
result, it is possible that a number of laws and regulations may be adopted
with
respect to the Internet. These laws may cover issues such as user privacy,
freedom of expression, pricing, content and quality of products and services,
taxation, advertising, intellectual property rights and information security.
Furthermore, the growth of electronic commerce may prompt calls for more
stringent consumer protection laws. Several states have proposed legislation
to
limit the uses of personal user information gathered online or require online
services to establish privacy policies. The Federal Trade Commission has
also
initiated action against at least one online service regarding the manner
in
which personal information is collected from users and provided to third
parties. We will not provide personal information regarding our users to
third
parties. However, the adoption of such consumer protection laws could create
uncertainty in Web usage and reduce the demand for our products.
We
are
not certain how business may be affected by the application of existing laws
governing issues such as property ownership, copyrights, encryption and other
intellectual property issues, taxation, libel, obscenity and export or import
matters. The vast majority of such laws were adopted prior to the advent
of the
Internet. As a result, they do not contemplate or address the unique issues
of
the Internet and related technologies. Changes in laws intended to address
such
issues could create uncertainty in the Internet market place. Such uncertainty
could reduce demand for services or increase the cost of doing business as
a
result of litigation costs or increased service delivery costs. In addition,
because our services are available over the Internet in multiple states and
foreign countries, other jurisdictions may claim that we are required to
qualify
to do business in each such state or foreign country. We are qualified to
do
business only in Nevada. Our failure to qualify in a jurisdiction where it
is
required to do so could subject it to taxes and penalties. It could also
hamper
our ability to enforce contracts in such jurisdictions. The application of
laws
or regulations from jurisdictions whose laws currently apply to our business
could have a material adverse affect on our business, results of operations
and
financial condition.
International
We
may
become subject to the laws and regulations of other countries, including
with
respect to transportation, privacy and consumer and online regulation. These
may
impose additional costs or other obligations on us.
Future
Regulation
Federal,
state, provincial or other governmental agencies may adopt new laws, regulations
and policies regarding a variety of matters that could affect our business
or
operations. We cannot predict what other matters such agencies might consider
in
the future, or what the impact of such regulations might be on our
business.
Employees
As
of
September 30, 2007, we employed one (1) person on a full-time basis and one
(1)
person on a part time basis.
Because
of the nature of our business, we do not expect to hire any new employees
in the
foreseeable future, but anticipate that we will be conducting most of our
business through agreements with consultants and third parties.
Reporting
Currency
All
of
the Company’s transactions are denominated in Canadian currency so the Company
has adopted the Canadian dollar as its functional and reporting
currency. Transaction gains and losses that arise from exchange rate
fluctuations on transactions denominated in a currency other than the local
functional currency are included in “General and Administrative Expenses” in the
statement of operations, which amounts were not material for 2006 or
2005.
The
Department of Corporation Finance in its advisory letter titled International
Financial Reporting and Disclosure Issues, dated
May
1, 2001 has stated, “Regulation S-X presumes that a US-incorporated registrant
will present its financial statements in US dollars. In rare instances, the
staff has not objected to the use of a different reporting currency. Those
instances have been limited to situations where the US-incorporated registrant
had little or no assets and operations in the US, substantially all the
operations were conducted in a single functional currency other than the
US
dollar, and the reporting currency selected was the same as the functional
currency. In these circumstances, reporting in the foreign currency would
produce little or no foreign currency translation effects under FASB Statement
No. 52.”
First,
the Company has its only facilities located Canada, and therefore has no
assets
or operations in the US. Second, all operations of the Company are conducted
only in Canadian currency. Third, the reporting currency is in
Canadian dollars which is the same currency that all operations were conducted
in. Therefore, reporting in Canadian dollars would produce little or
no foreign currency translation effects under FASB Statement No.
52.
Quarterly
Developments
During
the period ended September 30, 2007, we filed our Form 211 with the NASD
and
will use our best efforts to secure a listing on the OTC BB as soon as
possible.
Critical
Accounting Policies and
Estimates
Management
has identified the following policies and estimates as critical to the Company’s
business operations and the understanding of the Company’s results of
operations. Note that the preparation of this Form SB-1 requires management
to
make estimates and assumptions that affect the reported amounts of assets
and
liabilities, disclosure of contingent assets and liabilities at the date
of the
Company’s financial statements, and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates,
and the differences could be material.
RESULTS
OF OPERATIONS
RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007 (UNAUDITED) COMPARED
TO THE THREE MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED).
REVENUE
Our
net
revenue amounted to $8,832 for the three months ended September 30, 2007
compared to $12,128 for the three months ended September 30, 2006. Our
decrease in revenue for the three months ended September 30, 2007 compared
to
the three months ended September 30, 2006 is a direct result of the acquisition
of PCDC and our attempts on become a fully reporting public company, and
no
other factor(s) contributed to the increased revenue.
Fluctuations
in our revenues are primarily the result of the nature of the business model
we
operate. The Company can neither predict or assess, nor prevent
fluctuations. We attempt to offer services at competitive prices.
Because of the unpredictable nature of fluctuations, we do not attribute
fluctuations to any particular item or event. Our business model is designed
to
respond to fluctuation with immediate change. We do not account for or
analyze the fluctuations as we do not believe it to be a prudent use of
resources, given our business model.
OPERATING
EXPENSES
Our
total
operating expenses for the three months ended September 30, 2007 were $39,528
compared to $40,910 for the same period in the prior year. Expenses
consisted primarily of general operating expenses and professional fees.
Our
operating expenses are mostly attributable to our accounting and legal expenses
associated with our SEC filing and attempt to become listed on the
OTCBB.
NET
LOSS
Primarily
as a result of the foregoing, we had a net loss of $30,696 for the three
months
ended September 30, 2007 compared to a net loss of $28,781 for the same period
in the prior year. Our net loss for the period ended September 30, 2007 is
attributed to accounting and legal expenses associated with our SEC
filing.
LIQUIDITY
AND CAPITAL RESOURCES
At
September 30, 2007, our cash balance was $5,250. This represents a decrease
in
our financial position since September 30, 2006 when we reported cash of
$70,708.
As
of
September 30, 2007, a related party had loaned the Company USD$91,000. This
loan
is payable on demand, unsecured and does not accrue interest.
Developments
in July 2006, specifically our agreement with PCDC, directly resulted in
increased revenues and increased cash on hand.
Cash
flows from operating activities in 2007 through September 30 were negative
$4,239 compared with negative $26,309 in 2006 for the comparable
period.
Off-Balance
Sheet Arrangements
The
Company has no material transactions, arrangements, obligations (including
contingent obligations), or other relationships with unconsolidated entities
or
other persons that have or are reasonably likely to have a material current
or
future impact on its financial condition, changes in financial condition,
results of operations, liquidity, capital expenditures, capital resources,
or
significant components of revenues or expenses.
Market
Risk
In
the
normal course of business, the Company is exposed to foreign currency exchange
rate and interest rate risks that could impact its results of
operations.
The
Company plans to sell its services via the internet, and a substantial portion
of its net sales, cost of sales and operating expenses could be denominated
in
foreign currencies. This exposes the Company to risks associated with changes
in
foreign currency exchange rates that can adversely impact revenues, net income
and cash flow.
Cancellation
Policy
The
cost
of an initial service is non-refundable and includes a listing period of
four
(4) weeks. 100% of the initial listing price is forfeited by
customers wishing to cancel within the first four (4) weeks of an initial
listing. No refunds are given to customers for unused or partially
used components. After the initial listing period, all listing are on
a week to week renewal, again with no refunds for unused or partially used
components. There were no customer cancellations in 2006, and have
been none to date in 2007.
Plan
Of Operations for the Next 12 Months
Our
plan
of operations for the next twelve months is to proceed with the implementation
of our business plan. We will strive to launch all aspects of our
operations. Primarily, we will focus on generating revenue from our
website. Continuing operations will always focus on ways to increase
our marketing sales force. We may require up to $300,000 in additional financing
to expand our operations as outlined in the table below, subject to our cash
on
hand and actual revenues.
Goal
|
Expected
Manner of Occurrence or Method of Achievement
|
Date
When Step Should be Accomplished
|
Cost
of Completion
|
Complete
patent applications in the United States and Canada
|
Complete
patent search with assistance of intellectual property lawyer in
patent
process
|
2
–
12 months
|
$80,000
|
Create
corporate website
|
Complete
design and technology of our corporate web-site
|
2
–
3 months
|
$30,000
|
Launch
Marketing Phase
|
Implementation
of marketing plan
|
2
–
5 months
|
$75,000
|
Create
partnerships with developers
|
Incentives
that will be offered as part of our marketing campaign
|
4
-
12 months
|
$60,000
|
Create
corporate identity and brand recognition
|
Traditional
sources of advertising
|
5
-
12 months
|
$55,000
|
Our
total
expenditures over the next twelve months are anticipated to be approximately
$200,000 including the remaining estimated costs of becoming listed on the
OTCBB. Our cash on hand as of September 30, 2007 is $5,250. We do not have
sufficient cash to fund our operations for the next twelve months.
All
steps
will be undertaken contemporaneously.
Limited
operating history; need for additional capital
We
cannot
guarantee we will be successful in our business operations. Our business
is
subject to risks inherent in the establishment of a business enterprise,
including limited capital resources and possible cost overruns due to price
and
cost increases in services and products.
We
have
no assurance that future financing will be available to us on acceptable
terms.
If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result
in
dilution to shareholders.
Cash
Requirements
Our
cash
on hand as of September 30, 2007 is $5,250. We have sufficient cash on hand
to
pay the costs of some of our goals as outlined above as projected to twelve
(12)
months or less and to fund our operations for that same period of time. However,
we will require additional financing in order to proceed with some or all
of our
goals as projected at more than twelve (12) months. We presently do not have
any
arrangements for additional financing, and no potential lines of credit or
sources of financing are currently available for the purpose of proceeding
with
any of our goals projected at more than twelve (12) months.
Any
additional growth of the Company may require additional cash infusions. We
may
face expenses or other circumstances such that we will have additional financing
requirements. In such event, the amount of additional capital we may need
to
raise will depend on a number of factors. These factors primarily include
the
extent to which we can achieve revenue growth, the profitability of such
revenues, operating expenses, research and development expenses, and capital
expenditures. Given the number of programs that we have ongoing and not
complete, it is not possible to predict the extent or cost of these additional
financing requirements.
Notwithstanding
the numerous factors that our cash requirements depend on, and the uncertainties
associated with each of the major revenue opportunities that we have, we
believe
that our plan of operation can build long-term value if we are able to
demonstrate clear progress toward our objectives.
Progress
in the development of our business plan will likely lend credibility to our
plan
to maintain profitability. We anticipate that we will hire several members
to
our sales, marketing, research and development, regulatory and administrative
staff during the course of 2007 in order to fully implement our plans for
growth.
The
failure to secure any necessary outside funding would have an adverse affect
on
our development and results therefrom and a corresponding negative impact
on
shareholder liquidity.
Future
Financings
Our
plan
of operation calls for significant expenses in connection with the
implementation of our business plan over the course of the next 24 months.
For
the next twelve months, management anticipates that the minimum cash
requirements to fund our proposed goals and our continued operations will
be at
least $200,000. As such, we do not have sufficient funds on hand to meet
our
planned expenditures over the next 24 months. Therefore, we may require and
may
need to seek additional financing to meet our planned expenditures.
Obtaining
additional financing would be subject to a number of factors, including
development of our business plan and interest in our company. These factors
may
make the timing, amount, terms or conditions of additional financing unavailable
to us.
Revenue
Recognition
SAB
No.
104 requires that four basic criteria be met before revenue can be recognized:
(1) persuasive evidence of an arrangement exists; (2) delivery has occurred
or
services have been rendered; (3) the fee is fixed or determinable; and (4)
collectibility is reasonably assured. Should changes in conditions cause
management to determine that these criteria are not met for certain future
transactions, revenue recognized for a reporting period could be adversely
affected.
Goodwill
The
Company has not attributed any value to goodwill.
Accounting
for Income Taxes
The
Company accounts for income taxes under the asset and liability
method. Under this method, deferred assets and liabilities are
recognized based on anticipated future tax consequences attributable to
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases. The Company establishes a
valuation allowance to the extent that it is more likely than not that deferred
tax assets will not be recoverable against future taxable income.
Code
of Ethics
We
have
adopted a Code of Ethics and Business Conduct for Officers, Directors and
Employees that applies to all of our officers, directors and
employees.
Recently
Issued Accounting Pronouncement
SFAS No. 151,
Inventory Costs, is effective for fiscal years beginning after
June 15, 2005. This statement amends the guidance in Accounting
Research Bulletin No. 43, Chapter 4, Inventory Pricing, to
clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material (spoilage). The adoption of
SFAS No. 151 is expected to have no impact on the Company’s financial
statements.
SFAS No. 152,
Accounting for Real Estate Time-Sharing Transactions, is effective for
fiscal years beginning after June 15, 2005. This statement
amends SFAS No. 66, Accounting for Sales of Real Estate, to
reference the financial accounting and reporting guidance for real estate
time-sharing transactions that is provided in American Institute of Certified
Public Accountants Statement of Position 04-2, Accounting for Real Estate
Time-Sharing Transactions. The adoption of
SFAS No. 152 is expected to have no impact on the Company’s financial
statements.
SFAS No. 123(R),
Share-Based Payment, replaces SFAS No. 123, Accounting for
Stock-Based Compensation, and supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees. This statement
requires that the compensation cost relating to share-based payment transactions
be recognized at fair value in the financial statements. The Company
is required to apply this statement in the first annual period that begins
after
December 15, 2005. The adoption of SFAS No. 123(R) is
expected to have no impact on the Company’s financial statements.
SFAS No. 153,
Exchanges of Nonmonetary Assets– an amendment of APB Opinion
No. 29, is effective for fiscal years beginning after June 15,
2005. This statement addresses the measurement of exchange of
nonmonetary assets and eliminates the exception from fair-value measurement
for
nonmonetary exchanges of similar productive assets in paragraph 21(b) of
APB Opinion No. 29, Accounting for Nonmonetary Transactions, and
replaces it with an exception for exchanges that do not have commercial
substance. The adoption of SFAS No. 153 is not expected to
have a significant impact on the Company’s financial statements.
The
EITF
reached consensus on Issue No. 03-1, The Meaning of Other-Than-Temporary
Impairment and Its Application to Certain Investments, which provides
guidance on determining when an investment is considered impaired, whether
that
impairment is other than temporary, and the measurement of an impairment
loss. The FASB issued FSP EITF 03-1-1, Effective Date of
Paragraphs 10-20 of EITF Issue No. 03-1, The Meaning of
Other-Than-Temporary Impairment and Its Application to Investments, which
delays the effective date for the measurement and recognition criteria contained
in EITF 03-1 until final application guidance is issued. The adoption
of this consensus or FSP is expected to have no impact on the Company’s
financial statements.
SFAS
No.
154, Accounting Changes and Error Corrections, a replacement of APB No.
20, Accounting Changes, and SFAS No. 3, Reporting Accounting
Changes in Interim Financial Statements. SFAS No. 154 changes
the requirements for the accounting for and reporting of a change in accounting
principle. Previously, most voluntary changes in accounting
principles required recognition via a cumulative effect adjustment within
net
income of the period of the change. SFAS No. 154 requires
retrospective application to prior periods’ financial statements, unless it is
impracticable to determine either the period-specific effects or the cumulative
effect of the change. SFAS No. 154 is effective for accounting
changes made in fiscal years beginning after December 15, 2005; however,
this statement does not change the transition provisions of any existing
accounting pronouncements. The adoption of SFAS No. 154 is expected
to have no impact on the Company’s financial statements.
In
September 2005, the EITF reached consensus on Issue no. 05-08, Income Tax
Consequences of Issuing Convertible Debt with a Beneficial Conversion
Feature. EITF 05-08 is effective for financial statements
beginning in the first interim or annual reporting period beginning after
December 15, 2005. The adoption of EITF 05-08 is expected to
have no impact on the Company’s financial statements.
In
September 2005, the EITF reached consensus on Issue 05-02, The Meaning of
‘Conventional Convertible Debt Instrument’ in EITF Issue No. 00-19, ‘Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled
in, a
Company’s Own Stock.’ EITF 05-02 is effective for new
instruments entered into and instruments modified in reporting periods beginning
after June 29, 2005. The adoption of EITF 05-02 is expected to have
no impact on the Company’s financial statements.
In
September 2005, the EITF reached consensus on Issue No. 05-07, Accounting
for Modifications to Conversion Options Embedded in Debt Instruments and
Related
Issues. EITF 05-07 is effective for future modifications of debt
instruments beginning in the first interim or annual reporting period beginning
after December 15, 2005. The adoption of EITF 05-07 is expected
to have no impact on the Company’s financial statements.
RISK
FACTORS
INVESTING
IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO THE OTHER
INFORMATION CONTAINED IN THIS QUARTERLY REPORT, PROSPECTIVE PURCHASERS OF
THE
SECURITIES OFFERED HEREBY SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS
IN
EVALUATING THE COMPANY AND ITS BUSINESS.
BECAUSE
WE HAVE A LIMITED OPERATING HISTORY, IT IS DIFFICULT TO EVALUATE OUR BUSINESS
AND PROSPECTS.
The
Company commenced operations as PCDC, which then became the majority owned
operating subsidiary of the Company on July 1, 2006. Accordingly, we have
a
limited operating history from which you can evaluate our current business
and
our prospects. We will encounter risks and difficulties frequently experienced
by early-stage companies in rapidly evolving industries. Some of these risks
relate to our ability to:
·
|
attract
and retain consumers on a cost-effective
basis;
|
·
|
expand
and enhance our service offerings;
|
·
|
respond
to regulatory changes or demands;
|
·
|
operate,
support, expand and develop our operations, our website and our
software,
communications and other systems;
|
·
|
diversify
our sources of revenue;
|
·
|
maintain
adequate control of our expenses;
|
·
|
raise
additional capital;
|
·
|
respond
to technological changes; and
|
·
|
respond
to competitive market conditions.
|
If
we are
unsuccessful in addressing these risks or in executing our business strategy,
our business, financial condition or results of operations may
suffer.
IF
WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL
FAIL.
We
will
need to obtain additional financing in order to complete our business plan
as we
will not receive any funds from this registration.
We
do not
currently have any arrangements for financing and we can provide no assurance
to
investors that we will be able to find such financing. Obtaining additional
financing would be subject to a number of factors including investor acceptance
of our business plan and investor sentiment. These factors may make the timing,
amount, terms or conditions of additional financing unavailable to
us.
The
most
likely source of future funds presently available to us is through the sale
of
equity capital. Any sale of share capital will result in dilution to
existing shareholders.
WE
HAVE ONLY A LIMITED NUMBER OF CLIENTS AT ANY GIVEN TIME. EVEN IF WE OBTAIN
NEW
CLIENTS, THERE IS NO ASSURANCE THAT WE WILL MAKE A PROFIT.
We
have
only a limited number of clients at any given time. Even if we obtain new
clients, there is no guarantee that we will generate a profit. If we cannot
generate a profit, we will have to suspend or cease operations.
BECAUSE
WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT MARKETING OF OUR
SERVICES TO POTENTIAL KNOWN CLIENTS. AS A RESULT, WE MAY NOT BE ABLE TO ATTRACT
ENOUGH CLIENTS TO OPERATE PROFITABLY. IF WE DO NOT MAKE A PROFIT, WE MAY
HAVE TO
SUSPEND OR CEASE OPERATIONS.
Because
we are small and do not have much capital, we must limit marketing of our
services. We will initially generate revenues through the sale of services.
Because we will be limiting our marketing activities, we may not be able
to
attract enough clients to operate profitably. If we cannot operate profitably,
we may have to suspend or cease operations.
OUR
SERVICES ARE SUBJECT TO SEASONAL FLUCTUATIONS AND AS A RESULT THERE MAY BE
PERIODS WHEN WE SUSPEND OPERATIONS.
Seasonal
fluctuations in the real estate market will adversely impact revenues and
may
impede future growth. Historically revenues in this area are strongest in
the
first and second quarters of the calendar year. Prolonged periods where there
is
a lack of revenue may cause cutbacks and create challenges for meaningful
growth.
THE
MAJORITY OF OUR OFFICERS AND DIRECTORS WILL ONLY BE DEVOTING LIMITED TIME
TO OUR
OPERATIONS, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT IN PERIODIC
INTERRUPTIONS OR SUSPENSIONS OF OPERATIONS.
This
activity could prevent us from attracting clients and result in a lack of
revenues that may cause us to suspend or cease operations. With the
exception of our Chief Operating Officer, Steve Neil, our other officers
and
directors will only be devoting limited time to our operations. Though our
Chief
Operating Officer will be working full time, our other officers and directors
will be devoting approximately 8-12 hours per week of their time to our
operations. Because of this, our operations may be sporadic and occur at
times
which are convenient to our officers and directors. As a result, operations
may
be periodically interrupted or suspended which could result in a lack of
revenues and a possible cessation of operations.
BECAUSE
WE HAVE ONLY THREE OFFICERS AND DIRECTORS WHO ARE RESPONSIBLE FOR OUR MANAGERIAL
AND ORGANIZATIONAL STRUCTURE, IN THE FUTURE, THERE MAY NOT BE EFFECTIVE
DISCLOSURE AND ACCOUNTING CONTROLS TO COMPLY WITH APPLICABLE LAWS AND
REGULATIONS WHICH COULD RESULT IN FINES, PENALTIES AND ASSESSMENTS AGAINST
US.
We
have
only three officers and directors. They are responsible for our managerial
and
organizational structure which will include preparation of disclosure and
accounting controls under the Sarbanes Oxley Act of 2002. When these controls
are implemented, they will be responsible for the administration of the
controls. Should they not have sufficient experience, they may be incapable
of
creating and implementing the controls which may cause us to be subject to
sanctions and fines by the SEC which ultimately could cause you to lose your
investment.
BECAUSE
WE DO NOT MAINTAIN ANY INSURANCE, IF A JUDGMENT IS RENDERED AGAINST US, WE
MAY
HAVE TO CEASE OPERATIONS.
We
do not
maintain any insurance and do not intend to maintain insurance in the future.
Because we do not have any insurance, if we are made a party to a lawsuit,
we
may not have sufficient funds to defend the litigation. In the event that
we do
not defend the litigation or a judgment is rendered against us, we may have
to
cease operations.
BECAUSE
THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE ABLE
TO
RESELL YOUR STOCK.
There
is
currently no public trading market for our common stock. Therefore there
is no
central place, such as stock exchange or electronic trading system, to resell
your shares. If you do want to resell your shares, you will have to locate
a
buyer and negotiate your own sale.
BECAUSE
INSIDERS CONTROL OUR ACTIVITIES, THEY MAY BLOCK OR DETER ACTIONS THAT YOU
MIGHT
OTHERWISE DESIRE THAT WE TAKE AND MAY CAUSE US TO ACT IN A MANNER THAT IS
MOST
BENEFICIAL TO SUCH INSIDERS AND NOT TO OUTSIDE
SHAREHOLDERS.
Two
of
our officers and directors control all of our common stock, and we do not
have
any non-employee directors. As a result, they effectively control all matters
requiring director and stockholder approval, including the election of
directors, the approval of significant corporate transactions, such as mergers
and related party transaction. They also have the ability to block, by their
ownership of our stock, an unsolicited tender offer. This concentration of
ownership could have the effect of delaying, deterring or preventing a change
in
control of our company that you might view favorably.
OUR
MANAGEMENT DECISIONS ARE MADE BY OUR OFFICERS AND DIRECTORS; IF WE LOSE THEIR
SERVICES, OUR REVENUES MAY BE REDUCED.
The
success of our business is dependent upon the expertise of Daniel L. Baxter,
Samuel J. Alderson and Steve Neil. Because they are essential to our operations,
you must rely on their management decisions. They will continue to control
our
business affairs after the filing. If we lose their services, we may not
be able
to hire and retain other officers and directors with comparable experience.
As a
result, the loss of their services could reduce our revenues.
BECAUSE
THERE IS NOT NOW AND MAY NEVER BE A PUBLIC MARKET FOR OUR COMMON STOCK,
INVESTORS MAY HAVE DIFFICULTY IN RESELLING THEIR SHARES.
Our
common stock is currently not quoted on any market. No market may ever develop
for our common stock, or if developed, may not be sustained in the future.
Accordingly, our shares should be considered totally illiquid, which inhibits
investors’ ability to resell their shares.
BECAUSE
WE DO NOT HAVE AN AUDIT OR COMPENSATION COMMITTEE, SHAREHOLDERS WILL HAVE
TO
RELY ON THE ENTIRE BOARD OF DIRECTORS, ALL OF WHICH ARE NOT INDEPENDENT,
TO
PERFORM THESE FUNCTIONS.
We
do not
have an audit or compensation committee comprised of independent directors.
Indeed, we do not have any audit or compensation committee. These functions
are
performed by the board of directors as a whole. All members of the board
of
directors are not independent directors. Thus, there is a potential conflict
in
that board members who are management will participate in discussions concerning
management compensation and audit issues that may affect management
decisions.
OUR
GROWTH CANNOT BE ASSURED. EVEN IF WE DO EXPERIENCE GROWTH, WE CANNOT ASSURE
YOU
THAT WE WILL GROW PROFITABLY.
Our
business strategy is dependent on the growth of our business. For us to achieve
significant growth, potential customers must accept our website as a valuable
commercial tool. Home buyers and sellers, who have historically purchased
real
estate using traditional commercial channels, such as local real estate agents,
must instead rely on and feel confident in our product and our website.
Similarly, real estate agents will also need to accept or expand their use
of
our website and to view our website as an efficient and profitable channel
of
distribution for their listings or in identifying potential properties for
their
clients.
WE
OPERATE IN A HIGHLY COMPETITIVE MARKET, AND WE MAY NOT BE ABLE TO COMPETE
EFFECTIVELY.
The
real
estate market is intensely competitive and there may be larger more profitable
companies with established business practices that will be in direct competition
with our business model.
INTERRUPTIONS
IN SERVICE FROM THIRD PARTIES COULD IMPAIR THE QUALITY OF OUR
SERVICE.
We
rely
on third-party computer systems and other service providers. Third parties
provide, for instance, our data center, telecommunications access lines and
significant computer systems, support and maintenance services. Any interruption
in these, or other, third-party services or deterioration in their performance
could impair the quality of our service. We cannot be certain of the financial
viability of all of the third parties on which we rely. If our
arrangements with any of these third parties is terminated or if they were
to
cease operations, we might not be able to find an alternate provider on a
timely
basis or on reasonable terms, which could hurt our business.
IF
WE FAIL TO INCREASE OUR BRAND RECOGNITION AMONG CONSUMERS, WE MAY NOT BE
ABLE TO
ATTRACT AND EXPAND OUR ONLINE TRAFFIC.
We
believe that establishing, maintaining and enhancing the Company brand is
a
critical aspect of our efforts to attract and expand our online traffic.
The
number of Internet sites that offer competing services increases the importance
of establishing and maintaining brand recognition. In addition, we will need
to
increase our spending substantially on marketing and advertising with the
intention of expanding our brand recognition to attract and retain users
and to
respond to competitive pressures. However, we cannot assure you that these
expenditures will be effective to promote our brand or that our marketing
efforts generally will achieve our goals.
OUR
PRODUCT FEATURES MAY INFRINGE ON CLAIMS OF THIRD-PARTY PATENTS OR OTHER
INTELLECTUAL PROPERTY RIGHTS, WHICH COULD ADVERSELY AFFECT OUR
BUSINESS.
We
cannot
assure you that others will not obtain and assert patents or other intellectual
property rights against us affecting essential elements of our business.
If
intellectual property rights are asserted against us, we cannot assure you
that
we will be able to obtain license rights on reasonable terms or at all. If
we
are unable to obtain licenses, we may be prevented from operating our business
and our financial results may therefore be harmed.
EVOLVING
GOVERNMENT REGULATION COULD IMPOSE TAXES OR OTHER BURDENS ON OUR BUSINESS,
WHICH
COULD INCREASE OUR COSTS OR DECREASE DEMAND FOR OUR
PRODUCTS.
We
must
comply with laws and regulations applicable to online commerce. Increased
regulation of the Internet or different applications of existing laws might
slow
the growth in the use of the Internet and commercial online services, which
could decrease demand for our products, increase the cost of doing business
or
otherwise reduce our sales and revenues. The statutes and case law governing
online commerce are still evolving, and new laws, regulations or judicial
decisions may impose on us additional risks and costs of operations. In addition, new
regulations, domestic or international, regarding the privacy of our users’
personally identifiable information may impose on us additional costs and
operational constraints.
THERE
IS NO ESTABLISHED TRADING MARKET FOR OUR COMMON STOCK, AND THE MARKET PRICE
OF
OUR COMMON STOCK MAY BE HIGHLY VOLATILE OR MAY DECLINE REGARDLESS OF OUR
OPERATING PERFORMANCE.
There
is
no public market for our common stock as of the date of this filing. We cannot
predict the extent to which a trading market will develop or how liquid that
market might become. If you purchase shares of common stock in of the Company,
you will pay a price that was not established in the public trading markets.
The
initial public offering price will be determined us. You may not be able
to
resell your shares above the initial public offering price and may suffer
a loss
on your investment.
The
market prices of the securities of internet-related and online commerce
companies have been extremely volatile. Broad market and industry
factors may adversely affect the market price of our common stock,
regardless of our actual operating performance. Factors that could cause
fluctuation in the stock price may include, among other things:
·
|
actual
or anticipated variations in quarterly operating
results;
|
·
|
changes
in financial estimates by us or by any securities analysts who
might cover
our stock;
|
·
|
conditions
or trends in the real estate
industry;
|
·
|
announcements
by us or our competitors of significant acquisitions, strategic
partnerships or divestitures;
|
·
|
announcements
of investigations or regulatory scrutiny of our operations or lawsuits
filed against us;
|
·
|
additions
or departures of key personnel;
|
·
|
sales
of our common stock, including sales of our common stock by our
directors
and officers or our Founding Principles;
and
|
THE
MARKET PRICES OF THE SECURITIES OF INTERNET-RELATED AND ONLINE COMMERCE
COMPANIES HAVE BEEN ESPECIALLY VOLATILE.
Broad
market and industry factors may adversely affect the market price of our
common
stock, regardless of our actual operating performance. In the past, following
periods of volatility in the market price of their stock, many companies
have
been the subject of securities class action litigation. If we were sued in
a
securities class action, it could result in substantial costs and a diversion
of
management’s attention and resources and would adversely affect our stock
price.
WE
ARE GOVERNED SOLEY BY OUR TWO OFFICERS AND DIRECTORS, AND, AS SUCH, THERE
MAY BE
SIGNIFICANT RISK TO THE COMPANY FROM A CORPORATE GOVERNANCE
PERSPECTIVE.
Our
executive officers and directors make decisions such as the approval of related
party transactions, the compensation of Executive Officers, and the oversight
of
the accounting function. Accordingly, there will be no segregation of executive
duties and there may not be effective disclosure and accounting controls
to
comply with applicable laws and regulations, which could result in fines,
penalties and assessments against us. Accordingly, the inherent controls
that
arise from the segregation of executive duties may not prevail. In addition,
our
executive officers and directors will exercise full control over all matters
that typically require the approval of a Board of Directors. The actions
of our
executive officers and directors are not subject to the review and approval
of a
Board of Directors and, as such, there may be significant risk to the Company
from the corporate governance perspective.
Our
Executive Officers and Directors exercise control over all matters requiring
shareholder approval including the election of directors and the approval
of
significant corporate transactions. We have not voluntarily implemented various
corporate governance measures, in the absence of which, shareholders may
have
more limited protections against the transactions implemented by our executive
officers and directors, conflicts of interest and similar matters.
We
have
not adopted corporate governance measures such as an audit or other independent
committees as we presently only have one independent director. Shareholders
should bear in mind our current lack of corporate governance measures in
formulating their investment decisions.
SINCE
OUR EXECUTIVE OFFICERS AND DIRECTORS ARE NOT RESIDENTS OF THE UNITED STATES,
IT
MAY BE DIFFICULT TO ENFORCE ANY LIABILITIES AGAINST THEM.
Shareholders
may have difficulty enforcing any claims against the Company because our
executive Officers and Directors reside outside the United States. If a
shareholder desired to sue, shareholders would have to serve a summons and
complaint. Even if personal service is accomplished and a judgment is entered
against that person, the shareholder would then have to locate assets of
that
person, and register the judgment in the foreign jurisdiction where the assets
are located.
BECAUSE
OUR CHIEF EXECUTIVE OFFICER, WHO ALSO SERVES AS A DIRECTOR, HAS OTHER BUSINESS
INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF
TIME
TO OUR BUSINESS OPERATIONS, WHICH MAY CAUSE OUR BUSINESS TO
FAIL.
It
is
possible that the demands on Mr. Daniel L. Baxter, our Chief Executive Officer
and Director, from other obligations could increase with the result that
he
would no longer be able to devote sufficient time to the management of our
business. In addition, Mr. Baxter may not possess sufficient time to manage
our
business if the demands of managing our business increased
substantially. Specifically, Mr. Baxter also serves as an Officer and
Director of Global Developments Inc., a Delaware corporation, Kinder Travel,
Inc., a Nevada corporation, and Moto Auto Group Ltd., a Nevada
corporation. Presently, Mr. Baxter devotes approximately 8-12 hours a
week to the Company, and communicates frequently with Steve Neil, our Chief
Operating Officer, who is in charge of daily operations for PCDC.
WE
RELY ON OUR OFFICERS AND DIRECTORS FOR DECISIONS AND HE MAY MAKE DECISIONS
THAT
ARE NOT IN THE BEST INTEREST OF ALL STOCKHOLDERS.
We
rely
on our executive officers and directors to direct the affairs of the company
and
rely upon them to competently operate the business. We do not have
key man insurance on our executive officers and directors and have no written
employment agreements with them. Should something happen to our
officers and directors, this reliance on two individuals could have a material
detrimental impact on our business and could cause the business to lose its
place in the market, adversely affect our growth potential, or even fail.
Such
events could cause the value of our stock to decline or become
worthless.
WE
DO NOT EXPECT TO PAY ANY DIVIDENDS FOR THE FORESEEABLE
FUTURE.
We
do not
anticipate that we will pay any dividends to our stockholders in the foreseeable
future. Accordingly, investors must rely on sales of their common stock after
price appreciation, which may never occur, as the only way to realize on
their
investment. Investors seeking cash dividends should not purchase our common
stock.
OUR
SHARES QUALIFY AS PENNY STOCKS AND, AS SUCH, ARE SUBJECT TO THE RISKS ASSOCIATED
WITH “PENNY STOCKS”. REGULATIONS RELATING TO “PENNY STOCKS” LIMIT THE ABILITY OF
OUR SHAREHOLDERS TO SELL THEIR SHARES AND, AS A RESULT, OUR SHAREHOLDERS
MAY
HAVE TO HOLD THEIR SHARES INDEFINITELY.
The
Company’s common shares may be deemed to be “penny stock” as that term is
defined in Regulation Section “240.3a51 -1” of the Securities and Exchange
Commission (the “SEC”). Penny stocks are stocks: (a) with a price of less than
U.S. $5.00 per share; (b) that are not traded on a “recognized” national
exchange; (c) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ - where listed stocks must still meet requirement (a) above);
or
(d) in issuers with net tangible assets of less than U.S. $2,000,000 (if
the
issuer has been in continuous operation for at least three years) or U.S.
$5,000,000 (if in continuous operation for less than three years), or with
average revenues of less than U.S. $6,000,000 for the last three
years.
Section
“15(g)” of the United States Securities Exchange Act of 1934, as amended, and
Regulation Section “240.15g(c)2” of the SEC require broker dealers dealing in
penny stocks to provide potential investors with a document disclosing the
risks
of penny stocks and to obtain a manually signed and dated written receipt
of the
document before effecting any transaction in a penny stock for the investor’s
account. Potential investors in the Company’s common shares are urged to obtain
and read such disclosure carefully before purchasing any common shares that
are
deemed to be “penny stock”.
Moreover,
Regulation Section “240.15g -9” of the SEC requires broker dealers in penny
stocks to approve the account of any investor for transactions in such stocks
before selling any penny stock to that investor. This procedure requires
the
broker dealer to: (a) obtain from the investor information concerning his
or her
financial situation, investment experience and investment objectives; (b)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks
of
penny stock transactions; (c) provide the investor with a written statement
setting forth the basis on which the broker dealer made the determination
in
(ii) above; and (d) receive a signed and dated copy of such statement from
the
investor confirming that it accurately reflects the investor’s financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in the Company’s
common shares to resell their common shares to third parties or to otherwise
dispose of them. Shareholders should be aware that, according to Securities
and
Exchange Commission Release No. 34-29093, dated April 17, 1991, the market
for
penny stocks has suffered in recent years from patterns of fraud and abuse.
Such
patterns include:
(i)
|
control
of the market for the security by one or a few broker-dealers that
are
often related to the promoter or
issuer;
|
(ii)
|
manipulation
of prices through prearranged matching of purchases and sales and
false
and misleading press releases;
|
(iii)
|
boiler
room practices involving high-pressure sales tactics and unrealistic
price
projections by inexperienced sales
persons;
|
(iv)
|
excessive
and undisclosed bid-ask differential and markups by selling
broker-dealers; and
|
(v)
|
the
wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with
the
resulting inevitable collapse of those prices and with consequent
investor
losses
|
Our
management is aware of the abuses that have occurred historically in the
penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our
securities.
Available
Information
We
have
not previously been subject to the reporting requirements of the Securities
and
Exchange Commission. We have filed with the Commission a registration statement
on Form SB-1 under the Securities Act with respect to the shares offered
hereby.
This Report does not contain all of the information set forth in the
registration statement and the exhibits and schedules thereto. For further
information with respect to our securities and us you should review the
registration statement and the exhibits and schedules thereto. Statements
made
in this Report regarding the contents of any contract or document filed as
an
exhibit to the registration statement are not necessarily complete. You should
review the copy of such contract or document so filed.
You
can
inspect the registration statement and the exhibits and the schedules thereto
filed with the commission, without charge, at the office of the Commission
at
Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549. You can also
obtain copies of these materials from the public reference section of the
commission at 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed
rates.
You can obtain information on the operation of the Public Reference Room
by
calling the SEC at 1-800-SEC-0330. The Commission maintains a web site on
the
Internet that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Commission
at
www.sec.gov.
ITEM
3. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
As
required by Rule 13a-15 under the Exchange Act, we have carried out an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this quarterly
report. This evaluation was carried out under the supervision and with the
participation of our management, including our principal executive officer
and
principal financial officer. Based upon that evaluation, our principal executive
officer and principal financial officer concluded that our disclosure controls
and procedures are effective as at the end of the period covered by this
quarterly report to ensure that information required to be disclosed by us
in
the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the
rules and forms of the SEC.
Disclosure
controls and procedures are controls and other procedures that are designed
to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is recorded, processed, summarized and
reported, within time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our principal executive
officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.
Changes
In Internal Controls Over Financial Reporting
During
the quarter, the Company used an outside consulting firm to assist in the
preparation of financial statements in accordance with US Generally Accepted
Accounting Principles. This outside consulting firm also reviews
account reconciliations and all equity transactions. Other than the
described changes, no other Changes in internal controls over financial
reporting occurred during the current period that have materially affected,
or
are reasonably likely to materially affect, our internal controls over financial
reporting.
PART
II.
None.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS.
None.
ITEM
3. DEFAULTS UPON SENIOR
SECURITIES
None.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None.
We
have
filed our Form 211 with FINRA, and, upon filing this Report, we intend to
file
our Form 8A-12G to become a fully reporting company with the SEC.
ITEM
6. EXHIBITS AND REPORTS ON FORM
8-K
(a)
Exhibits.
EXHIBIT
NUMBER
|
DESCRIPTION
|
LOCATION
|
3.1
- 3.2
|
Articles
of Incorporation and Bylaws
|
Previously
Filed.
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification (CEO)
|
Filed
herewith
|
31.2
|
Rule
13a-14(a)/15d-14(a) Certification (CFO)
|
Filed
herewith
|
32.1
|
Section
1350 Certification (CEO)
|
Filed
herewith
|
32.2
|
Section
1350 Certification (CFO)
|
Filed
herewith
|
(b) Reports
on Form 8-K.
None.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
1st
HOME BUY
& SELL LTD.
|
|
|
DATE:
November 26, 2007
|
|
|
By:
/s/ DANIEL L. BAXTER
|
|
Daniel
L. Baxter, President, CEO, &
|
|
Director
|